The Russian Defence Ministry has released footage they claim shows HMS Defender being 'chased out' of Ukrainian waters.
The clip reportedly shows the British warship being removed by military aircraft and vessels.
Russian military officials last night said they told the Royal Navy to 'change course or we'll fire' as it passed through an internationally recognised shipping channel.
Britain dismissed Moscow's claims that warning shots were fired, and that bombs were dropped in the ship's path.
HMS Defender has been carrying its "own set of missions" in the Black Sea, the Ministry of Defence confirmed.
Now footage has been released by Moscow of HMS Defender being 'chased out' of the waters. The clips show fast Russian warplanes 'buzzing' the British warship and other images show the vessel as it would appear through weapons screens.
Britain has not yet commented on the video but the MOD said the 152 metre-long, 8,500-tonne vessel was "conducting innocent passage through Ukrainian territorial waters in accordance with international law".
In a statement posted on Twitter, it said: "We believe the Russians were undertaking a gunnery exercise in the Black Sea and provided the maritime community with prior warning of their activity.
"No shots were directed at HMS Defender and we do not recognise the claim that bombs were dropped in her path."
The confrontation took place near Cape Fiolent, a landmark on the coast of Crimea, it was reported.
"To a large extent this is about testing each other's mettle, seeing how far Russia is prepared to go to defend what it claims are its territorial waters," Sky's Moscow correspondent Diana Magnay said.
"They want to see how far the UK and NATO are prepared to go to defend Ukrainian sovereignty.
"These are not Russian territorial waters, whatever Russia says. The UK says it was passing through an internationally recognised traffic separation corridor; Russia clearly doesn't see it that way."
The dispute centres on the Black Sea around annexed Crimea - a territory Russia claims after its military occupation of the region from Ukraine in 2014.
The British destroyer was reportedly issued with a warning as it entered the 12-mile limit of Crimea's territorial waters near Cape Fiolent, in the Black Sea, shadowed by Russian vessels and aircraft.
Defence correspondent Jonathan Beale, who is aboard HMS Defender, claimed the British warship's crew were ready with weapons systems loaded as they approached the southern tip of the peninsula, while Russia issued verbal warnings.
He told the BBC : "Increasingly hostile warnings were issued over the radio - including one that said 'if you don't change course I'll fire'.
We did hear some firing in the distance but they were believed to be well out of range."
According to the Mail Online, HMS Destroyer's Captain Vincent Owen described the mission as confident but non-confrontational as his ship made its way to an internationally recognised shipping lane.
But Mr Beale claimed its course was a "deliberate move to make a point to Russia".
The UK and much of the international community do not recognise Russia's sovereignty in the region.
The Crimea crisis saw Russia expelled from the G8 - which is consequently now the G7.
A statement from the British Ministry of Defence issued Wednesday reads: "No warning shots have been fired at HMS Defender.
"The Royal Navy ship is conducting innocent passage through Ukrainian territorial waters in accordance with international law.
"We believe the Russians were undertaking a gunnery exercise in the Black Sea and provided the maritime community with prior-warning of their activity."
